As EU finance ministers burnt the midnight oil in their desperate search for a solution to the euro crisis, they knew they were in the next and potentially most damaging phase of the financial crisis that has gripped world markets since the summer of 2007.

At the very least the stakes were as high as they were in the aftermath of the collapse of Lehman Brothers in September 2008. After the global markets closed on Friday night policymakers were alarmed by a number of factors, not least that trading volumes were high and there were signs that the banking system was seized with panic as it was three years ago. In London, stock market selling was taking place in volumes last seen during the middle of the Lehman crisis. Financial instruments which help gauge traders' predictions about the risk of countries and banks defaulting were reflecting anxiety that a second stage of the credit crunch was developing.

The €110bn (£95bn) bailout of Greece announced the week before had not been enough to stop markets worrying about "contagion". Traders believed that other indebted countries such as Ireland, Portugal and Spain would suffer the same fate as Greece, where the severity of austerity measures has caused rioting on the streets and the deaths of three bank workers. In another echo of the Lehman Brothers debacle, the "who's next" mentality gripped traders, flooring HBOS in the UK, AIG in the US and three weeks later Royal Bank of Scotland. Countries, not consumers and banks, were in the sights of the markets this time.

Today, at least, the market was relieved by the EU's €750bn package, hammered out until 2am on Monday as eurozone ministers tried to convince the UK to participate in the emergency fund. The European Central Bank had heeded calls by dealers to start buying government bonds to inject liquidity into markets but has also set up an emergency fund in readiness for countries next at risk of default on their debt.

Marco Annunziata, chief economist for UniCredit Group, said: "The decision took much longer than expected, but for once the scope of the actions unveiled dwarfed previous leaks and speculation: this is shock and awe part II and in 3-D. This truly is overwhelming force and should be more than sufficient to stabilize markets in the near term, prevent panic and contain the risk of contagion."

Central banks around the world stepped in to prop up the markets and even the Chinese Premier Wen Jiabao opined on the importance of the international effort. "If certain developed countries are not able to effectively cut down expenditures and increase revenues, the possibility that the sovereign debt crisis might spread globally cannot be ruled out," the Chinese premier said.

Long-standing market participants and experts felt that ever since the problems in Greece emerged, policymakers in the EU had been unable to keep pace with the markets' concerns and reactions – just as in the aftermath of Lehman Brothers' collapse.

Nick Parsons, head of strategy at National Australia Bank, said that the measures unveiled to the markets had now put the policymakers "significantly ahead of the markets during which period we can have a period of fiscal adjustment".

It is a sentiment echoed by Howard Archer, chief Europe economist of IHS Global Insight. "People are looking at this in the light of Lehman," he said. "There had been a drip-drip policy response to the Greek situation and there was a perception that the authorities were behind the curve. This has been more gradual [than Lehman] but Greece has been the trigger for all this". As long ago January, there had been concerns that Greece could be the "next Lehman Brothers" – such is the fear in which the collapse of the Wall Street bank is held by markets.

Gary Jenkins, head of fixed income research at brokers Evolution, predicted: "If the lack of investor confidence leads to funding problems in Greece market participants will look around and ask themselves the question 'what looks like Greece?' Is it Portugal, Italy, Spain? This is where potentially Greece could become the next Lehman's as investors move from one target to the next just like they did in the banking crises of 2008."

Jenkins said that by the end of last week it had become all apparent that Portugal and Spain were on the brink of joining Greece "in the unable to borrow in the markets club".

"After total inaction from the ECB the situation had deteriorated and there was the potential for a complete melt down in the market this week," Jenkins said.

Hence the need for urgent and decisive action by the EU, particularly as banks had been buying Portuguese and Spanish bonds to help bolster their returns and now faced huge losses.

"That is one of the reasons why the EU has had to provide such a massive support package now. It is not just trying to save the banking sector, but it is saving the government bond sector, and therefore itself," Jenkins said.

The key question in the market, just as it was after governments around the world bailed out their banks after Lehman collapsed, is this: how long will the emergency measures last before a new crisis erupts? The taxpayer bailout of the banks was followed a few months later by schemes to protect banks from the bad debts – the troubled asset relief programme in the US and the asset protection scheme in the UK.

Geoffrey Wood, professor of economics at Cass Business School, is scathing about the deal. "They haven't addressed the fundamental problems. They haven't fiscal transfers and they haven't thought through how to handle differences in productivity," Wood said. Parsons reckons the EU has given itself a year's breathing space while Simon Ward of the fund group Henderson notes it will "suppress contagion and ease near-term financing but does not remove long-term solvency concerns".

Market experts note that while there have been some dramatic recoveries in markets today – French and German stock markets have rallied more than 8% – other indicators about sentiment are less vitriolic. The much-watched rate at which banks lend to each other in the money markets – known as three month sterling Libor – remained at elevated levels . A sign, perhaps, of the nervousness that remains.